If you receive SSI benefits, you might want to earn extra money and gain more independence. However, you may worry about how working could affect your financial support. This article explains how working while on SSI can affect your benefits.
What is SSI?
The federal government provides Supplemental Security Income (SSI) to help people with low income and resources who are aged, blind, or disabled. It aims to assist recipients in meeting their basic needs, like food, clothing, and shelter. Unlike Social Security Disability Insurance (SSDI), SSI does not require you to have a work history.
To qualify for SSI, you must be at least 65 years old or have a qualifying disability, which can be physical or mental. Your income and resources must also be below certain limits set by the Social Security Administration (SSA).
How are SSI Benefits Calculated?
The SSI income limit is based on the “federal benefit rate” (FBR), which is the maximum monthly payment you can receive. The FBR increases each year because of cost-of-living adjustments. You can find the current FBR on the SSA’s website.
The SSA calculates your SSI benefits by looking at various types of “countable” income and subtracting that from the FBR. Here are some examples of countable income:
- Unearned Income: This includes Social Security benefits, pensions, state disability payments, unemployment benefits, interest, dividends, and cash from friends or family.
- In-Kind Income: This includes free or low-cost shelter.
- Deemed Income: In some cases, part of a spouse’s, parent’s, or sponsor’s income may count when calculating SSI benefits.
- Earned Income: This includes wages, net earnings from self-employment, royalties, honoraria, and payments from sheltered workshops.
SSI Work Incentive Exclusions
The SSA allows certain exclusions when figuring out your countable income. The SSA does not count the first $20 of any income against your SSI benefits. This is called the General Income Exclusion and applies to all types of income.
The SSA also provides several work incentives to encourage SSI recipients to seek jobs without immediately losing their benefits. These include:
Earned Income Exclusion: The SSA does not count the first $65 of earned income plus half of any earnings beyond that.
Student Earned Income Exclusion: Blind or disabled individuals under 22 who attend school can earn a limited amount without it affecting their benefits. The limits change each year, so check the current limits on the SSA’s website.
Plan to Achieve Self-Support (PASS): This program allows SSI recipients to set aside money for a work goal, like education or starting a business, without losing SSI eligibility.
Impairment-Related Work Expenses (IRWE): These are costs you need to work because of your disability, such as special equipment, transportation, and attendant care services.
How Working Affects Your SSI Benefits
When you start working while receiving SSI, here’s how your income can affect your benefits:
- Reporting Your Income: You must report any changes in your income, like starting a new job, to the SSA within 10 days after the end of the month when the change happened.
- Calculating Your New Benefit: The SSA will recalculate your SSI benefit based on your new earnings, applying the exclusions mentioned earlier.
- Gradual Reduction: As your earnings go up, your SSI benefits will decrease by one dollar for every two dollars you earn. However, because of the work incentives, you may end up with more total income than if you were not working.
- Break-Even Point: There’s a point where your earnings will be high enough that your SSI benefits will stop completely. The SSA refers to this as the “break-even point.”
- Continued Medicaid Eligibility: Often, even if your SSI cash benefits stop because of your earnings, you might still qualify for Medicaid coverage under a special rule called “1619(b).”
- Reinstatement of Benefits: SSA has rules to help you return to receiving benefits if you need to stop working because of your disability.
Seeking Professional Advice
Understanding the rules about working while on SSI can be difficult. It could be helpful to talk to a qualified Social Security counselor or disability attorney who can give you tailored advice based on your situation, contact Brock & Stout today.